'Hard' Brexit risks disrupting supply of thousands of drugs

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Dive Brief:

A trade group of European drugmakers warned Thursday that a "hard" exit by the UK from the European Union without an agreement to smooth the process risks disrupting the supply of critical medical products.

Nearly half of the group's members expect trade delays if the UK and Europe reset trade relations back to World Trade Organization rules, according to a survey conducted by the European Federation of Pharmaceutical Industries and Associations (EFPIA).

"The EU and UK cannot afford to wait any longer to ensure that the necessary cooperation on medicines is in place from the day the UK leaves the EU," said EFPIA Director General Nathalie Moll in a Nov. 9 statement.

Dive Insight:

The UK and the European Union are currently hung up negotiating the terms of the UK's departure from the economic bloc. If an agreement isn't reached by March 2019, a so-called "hard Brexit" will be triggered, severing regulatory, trade and commercial ties between the regions without any framework to govern the split.

Pharma companies, in particular, could see a major impact. In addition to having supply and manufacturing ties across the UK and EU, regulatory approval and marketing authorization for medicines are governed under EU rules.

Nearly 3,000 medical products are produced and shipped from the UK to the EU, while 3,200 products are exported in the reverse direction, according to the EFPIA survey. All told, 45 million patient packs are supplied from the UK to the EU each month.

British pharma AstraZeneca plc isn't leaving anything to chance. The company's CEO, Pascal Soriot, told analysts Thursday morning during a third quarter earnings call that the company is preparing for all eventualities.

"We have a team of people working to avoid an interruption in the supply chain," he said. "Some of our products cross borders a number of times We are duplicating QA and release process in the UK and Europe, and we may have to recruit people in other sites outside the UK. We have no choice – we have to have a contingency plan in case of a hard Brexit," emphasized Soriot.

Sixty percent of EFPIA members report having batch release for products from the UK, necessitating either the relocation of batch release sites or the duplication of testing.

From a regulatory perspective, 400 centrally authorized products (i.e. by the European Commission) list a UK legal entity as the marketing authorization holder (MAH). Under EU rules, the MAH needs to be located within the bloc, which would necessitate pharma companies transfer ownership to holders established in the EU.

Transferring ownership entails more than just checking a box — the EFPIA estimates that its members and the EMA will need to carve out 5,000 review months to handle the transfer procedure for all 2,400 centrally authorized marketing authorizations with UK legal entities.

"This survey highlights not only the sheer scale of pharmaceutical industry integration across Europe — but also how essential this integration is to the successful and timely supply of live-saving treatments to more than 500 million patients," said Mike Thompson, head of the The Association of the British Pharmaceutical Industry, in a Nov. 9 statement on the survey.

In addition to the potential for major risks to drug supply from Brexit, the pharma industry will also have to account for the pending relocation of the European Medicines Agency. The European Commission is set to decide on a new home for the regulator later this month, and the move could lead to widespread staff departures — threatening the ongoing review and oversight of drugs in Europe.

Recommended Reading:

European Federation of Pharmaceutical Industries and Associations
Brexit survey